The equipment rental industry will reach $57.3 billion in the United States in 2020, according to the latest five-year forecast released by the American Rental Association, which projects a compound annual growth rate of 4.9 percent. The numbers in the forecast, updated at the end of July, are slightly modified compared to ARA’s quarterly forecast in late April, reflecting changes in the marketplace. ARA now projects industry revenue to increase by 4.9 percent in 2016 to a record $47.6 billion and to grow another 4.6 percent in 2017 to reach $49.8 billion.

The new forecast extends the projections to 2020 for the first time, showing steady revenue growth from 2016 through 2020 of between 4.6 percent and 5 percent each year.

“While the forecast has been adjusted to reflect changing market conditions, equipment rental is growing at more than double the rate of GDP growth and that is a good sign for the industry,” said John McClelland, ARA’s vice president for government affairs and chief economist. However, Scott Hazelton, managing director of IHS Economics, the economic forecasting firm that compiles data and analysis for ARA’s Rental Market Monitor, says economic growth in the first half of the year in the U.S. has not been as strong as previously expected because of uncertain growth overseas and the increasing value of the dollar.

“This also has been acerbated by uncertainty surround future policy direction from a muddled presidential campaign season,” said Hazelton. “However, construction remains strong, particularly in the residential sector, both new and home improvements. While nonresidential growth is slowing, we remain on track for another year of solid gains and consumer spending also remains strong. The slight adjustment in the forecast growth reflects the fact that the economic and construction fundamentals remain positive.”

The biggest change to the new forecast concerns Canada. Instead of projecting a decrease in total revenues in 2016 as it did in April, the ARA Rental Market Monitor now forecasts a 0.8-percent increase to $4.976 billion and total rental revenue in Canada is expected to grow at a compound annual growth rate of 4.2 percent between 2016 and 2020. IHS expects real residential and nonresidential construction to rebound in 2017 and beyond, reaching $5.859 billion by 2020.